International marketing

Stated simply, international marketing is marketing across national boundaries. Since the end of World War II, improved travel, communications, and technology have fostered a tenfold increase in trade among nations.

A company choosing to enter international markets can achieve many benefits, but can also encounter many difficulties.

The main reason for companies to do international marketing is to exploit a better business opportunity in terms of increased sales and profits. Either firms are limited in their home country or their opportunities are great in the foreign countries.

Many companies find themselves with little room for growth in their domestic market. Competition may increase and leave a smaller portion of the pie tо enjoy, or demand may shift to a newer, better product. The economic environment in the home country may be undesirable because of higher taxes or a recession. It would seem logical to turn to other markets in any of these cases. So foreign markets may offer an opportunity for growth. A product that is mature and facing dwindling sales at home may be new and exciting in other countries.

Among the conditions that influence the success of international marketing are economic, political, legal and cultural ones.

Economic conditions. There are several important rules to international marketing in light of а соuntry's economic conditions: the product must fit the needs of the country's consumers and the product must be sold where there is the income to buy it and effective means of distributing, using, and servicing it. Five aspects of these considerations are (1) the country's stage of economic development, (2) multination trade groups, (3) the country's economic infrastructure, (4) consumer income, and (5) currency exchange rates.

There are over 200 countries in the world today, each of which is at a slightly different point in terms of its stage of economic development. However, they can be classified into two major groupings that will help the international marketer better understand their needs:

• Developed countries have somewhat mixed economies. Private enterprise dominates, although they have substantial public sectors as well.

• Developing countries are in the process of moving from an agricultural to an industrial economy. There are two subgroups within the developing category: (1) those that have already made the move and (2) those that remain locked in the preindustrial economy.

Political and legal conditions. The difficulties in assessing the political and legal condition of a country lie not only in identifying the current condition but also in estimating exactly how long that condition will last. Some transnational companies use analyses ranging from computer projections to intuition and forecasts to assess a country's condition. The dimensions being evaluated include the government attitude toward foreign marketers, the stability and financial poli­cies of the country, and government bureaucracy.

Some countries invite foreign investment through of­fering investment incentives, helping in site location, and providing other ser­vices. Hungary is currently offering a five-year " tax holiday" —a period during which no corporate taxes will be assessed—to encourage foreign firms to de­velop manufacturing capabilities there. In addition, a country or group of coun­tries can establish equitable standards to enable foreign products to compete fairly in their domestic markets. The European Union has a huge staff in Brussels, Belgium, developing directives to establish such standards for prod­ucts marketed in the EU after 1992.

Millions of dollars have been lost in the Middle East as a result of war and changes in governments. When instability is suspected, companies do everything they can to protect themselves against losses. Companies will limit their trade to exporting products into the country, minimizing investments in new plants in the foreign economy. Currency will be converted as soon as possible.

Even friendly countries can change their policies toward international marketing. Quotas can be revised or set, currency can be blocked, duties can be imposed, and in extreme cases companies can be expropriated.

1. What are the benefits of international marketing?

2. What difficulties can a company encounter when entering international marketing?

3. What are some of important rules to international marketing?

4. What is the main difficulty in assessing the political and legal condition of a country?

5.What dimensions are taken into account when evaluating political and legal condition?

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